Sentiment within Britain’s property sector is on the rise after the Labour government’s election victory and recent Bank of England interest rate cut.
According to the Royal Institute of Chartered Surveyors (RICS), expectations have climbed over the past month for sales to rise, with optimism hitting its highest since 2020.
A survey published by the industry body on Thursday found a net balance of 30% of estate agents expect increasing sales over the next three months, against 22% in June.
For the full year ahead, a net balance of 45% of respondents said they expected sales to rise, compared to 40% previously.
“The new government’s focus on boosting housing development alongside the recent quarter-point base rate cut does appear to have shifted the mood music in the sales market,” RICS chief economist Simon Rubinsohn said.
Britain’s new Labour government has pledged to reform housing planning rules after taking power in early July.
Builder Persimmon PLC (LSE:PSN) is among companies to have echoed optimism over looser planning rules, noting in interim results on Thursday that it was encouraged by proposals.
“It is positive to see that the recent election has not had a negative impact,” Daniel Austin, chief executive of property finance firm ASK Partners, commented.
Aiding optimism was the Bank of England’s decision to lower base interest from 5.25% to 5% earlier this month, which has coincided with a decrease in mortgage rates.
House prices subsequently climbed at their fastest rate since the start of the year in July, by 2.3% annually, and after two stagnant months, lender Halifax reported on Wednesday.
RICS added on Thursday that new buyer enquiries rose 2% in July, following four consecutive negative monthly readings.
Separately, property portal Zoopla published research showing a fifth of homebuyers were viewing properties for less than 20 minutes before submitting offers, with tours lasting 49 minutes on average.
“Everyone is waiting in anticipation of what the new government will do to drive the construction of new homes [...] and it is likely that initiatives announced in the coming months will give the market a further boost,” Austin added.